The translation of this document is outdated.
Translation validity: 01.01.2011.–31.12.2011.
Amendments not included: 15.12.2011.

The Saeima1 has adopted
and the President has proclaimed the following Law:

Financial
Stability Fee Law

Section 1. Purpose of the Financial
Stability Fee

The objective of the financial stability fee (hereinafter -
fee) is to strengthen the whole financial system in order, if
necessary, to finance measures which would decrease the negative
impact of the credit institutions having entered into financial
difficulties on the other participants of the financial market,
as well as partially compensate for the State budget financing
diverted in order to stabilise the situation in the financial
sector from which the banking sector as a whole gained a direct
or indirect benefit.

Section 2. Fee Payers

Fee shall be paid by the credit institutions (excluding
electronic money institutions) registered in the Republic of
Latvia and their branches in the Member States and foreign
countries, as well as the branches of the credit institutions
registered in the Member States and foreign countries located in
the Republic of Latvia (hereinafter - fee payers).

Section 3. Tax Period

The tax period for the fee shall be one calendar year.

Section 4. The Fee Object and
Rate

(1) A fee object shall be the total liabilities of the fee
payer at the end of the tax period from which the following shall
be deducted:

1) deposits included in the deposit guarantee scheme of the
Republic of Latvia or another Member State;

2) mortgage debentures issued by the fee payer;

3) underlying obligations included in the calculation of own
capital as the subordinated capital in accordance with the
regulations of the Financial and Capital Market Commission.

(2) The fee rate shall be 0.036 per cent per year of the
amount referred to in Paragraph one of this Section.

Section 5.Procedure for Calculation and Payment of
the Fee

(1) Payment of the fee shall be divided for quarters in the
tax period, paying one fourth of the calculated payment each
quarter.

(2) The fee payer shall calculate the fee in accordance with
Section 4 of this Law and pay into the State budget revenue
account indicated by the State Treasury by the 15th day of the
month following the accounting quarter, submitting a document
certifying the payment to the Financial and Capital Market
Commission.

(3) The fee payer shall calculate the quarterly fee payments
of the tax period on the basis of the data of the financial
accounts included in the annual account of the previous tax
period, correcting the total liabilities shown at the end of the
previous tax period in accordance with Section 4, Paragraph one
of this Law and dividing the calculated payment amount
proportionally into quarters, and compile a quarterly fee payment
schedule.

(4) The fee payer shall harmonise the quarterly fee payment
schedule for the tax period with the Financial and Capital Market
Commission by 15 April of the tax period.

(5) If it is determined that the fee amount paid in the
accounting quarter is less than the amount which should be paid
in accordance with the quarterly fee payment schedule referred to
in Paragraph four of this Section or the rate prescribed in this
Law, the fee payer shall, within 30 days following the receipt of
an account from the Financial and Capital Market Commission, pay
the remaining fee amount into the State budget revenue account
indicated by the State Treasury.

(6) The fee payer shall, by 15 April of the next tax period,
draft and submit to the Financial and Capital Market Commission
the financial stability fee declaration for the tax period
(hereinafter - declaration). The specimen for the declaration and
procedure for completion thereof shall be determined by the
Cabinet.

(7) When drafting the declaration, the fee payer shall perform
the final calculation of the fee for the tax period in accordance
with Section 4 of this Law, on the basis of the data of the
financial accounts included in the annual account of the tax
period.

(8) If following the performance of the calculation referred
to in Paragraph seven of this Section it is determined that the
fee amount paid for the quarterly payments is less than the
amount which should be paid in accordance with the rate
prescribed in this Law, the fee payer shall, within 30 days
following the submission of the declaration of the tax period to
the Financial and Capital Market Commission, pay the remaining
fee amount into the State budget revenue account indicated by the
State Treasury, submitting a document certifying the payment to
the Financial and Capital Market Commission.

(9) The Financial and Capital Market Commission has the right
to request the fee payer to make an additional fee payment within
30 days, informing the fee payer thereof in writing, if it
following the control (inspection) of the fee payable by the fee
payer has determined that the fee payer has not performed a
complete payment of the fee and has taken a decision regarding
the justification of an additional fee payment.

(10) If following the performance of the calculation referred
to in Paragraph seven of this Section it is determined that the
fee amount paid by the fee payer for the quarterly payments is
greater than the amount which should be paid in the tax period in
accordance with the rate prescribed in this Law, the overpaid fee
amount shall be included in the payments for the following tax
period.

(11) The Financial and Capital Market Commission has the right
to delay the inclusion of the overpaid fee amount into the
payments for the following tax period, informing the fee payer
thereof in writing, if following the receipt of the declaration
of the tax period the decision is taken to commence control
(inspection) of the fee payable by the fee payer, - until the
day, when the Financial and Capital Market Commission has taken a
decision regarding the justification of the overpayment.

(12) If a fee payer commences or terminates its activity in
the middle of a tax period, the fee amount shall be determined
proportionally to its period of activity during the tax
period.

(13) If a fee payer commences its activity in the middle of a
tax period, the quarterly fee payments for the first tax period
shall be calculated from the total liabilities indicated in the
accounts balance of the last month of the accounting quarter of
the fee payer, making the relevant adjustment in accordance with
Section 4 of this Law.

Section 6. Fee Administration

(1) The fee shall be administered by the Financial and Capital
Market Commission.

(2) The Financial and Capital Market Commission:

1) shall harmonise the calculated quarterly fee payment
schedule for the tax period by 15 April of the tax period;

2) shall control the payment of the fee;

3) shall control the completeness and accuracy of the
information indicated in the declaration referred to in Section
5, Paragraph six of this Law;

4) shall prepare and send an account to a fee payer for an
incompletely performed fee payment.

Section 7.Liability for Exceeding the Time Limit
for Payment of the Fee

If a fee payer does not make a fee payment within the time
limit prescribed by this Law, the late charge for the delayed
period shall be calculated to it in accordance with the Law On
Taxes and Fees.

Transitional
Provisions

1. The Cabinet shall, by 1 July 2011, assess the options of
applying fees to other financial and capital market participants
and other consumer credit service providers in future tax periods
and, if necessary, draft the relevant amendments to this Law.

2. The Cabinet shall, by 31 January 2013, assess the options
of channelling the fee payments into a specially established
stability fund in future tax periods and, if necessary, draft the
relevant amendments to this Law.